Underdog Marketing: Competing Against the Big Guys

Exceptional customer service enables an underdog franchise brand to use public opinion to boost the perceived value of its merchandise.

By Sherri Fishman, CFE

Throughout history there has always been an underdog. From the biblical story of David and Goliath to competition between sports teams, Americans love to love the underdog. In the world of franchising, underdog competition is most often played out with marketing. Obviously, not every franchise has deep pockets or the ability to push primetime commercials across the major TV networks. However, just because a franchise lacks the expansive budget of a larger, more established brand, doesn’t mean its marketing tactics have to be any less effective. By capitalizing on every occasion as a marketing opportunity, even a brand with the smallest budget can compete against the big boys. Ever heard the phrase, “It’s not the size of the dog in the fight that matters; it’s the size of the fight in the dog?” Franchises with tight marketing budgets can make up for their smaller size by becoming fiercely strategic and disciplined. In fact, smaller budgets mean more flexibility and faster turnaround time, often a key advantage in the battle for market share. Deploying an effective, powerful marketing strategy starts with identifying key opportunities ripe for the picking. Rather than trying to compete with the big brands and their big budgets, Fishman PR advises its franchise clients to focus on utilizing every resource available in a cohesive, impactful manner. Based on experience with franchise brands of smaller sizes, here are some key opportunities and tactics for underdog marketing.

Identify a Target Audience or Two

Not every customer has the same background and expectations. As a result, a franchise brand operating on a tight budget should identify its key customer demographic. Is the primary customer target audience middle class couples or C-level executives? By building a clear understanding of who a franchise is targeting and their needs, pain points, dreams and expectations, a brand is better able to make its marketing dollars count. Rather than trying to be all things to all people, a franchise brand with a tight budget can market toward those who are most accessible, willing and able to utilize its products or services. Selective marketing initiatives create a higher return on investment because they reduce the time and money spent trying to reach an audience that may not ever buy.

Embrace Word-of-Mouth Marketing

It’s often said that word-of-mouth marketing is the most powerful of all. Data supports this theory; in fact Lithium, a social media marketing solution provider, reports that 92 percent of consumers trust recommendations from friends and family more than other forms of advertising. According to AdAge, about 20 percent to 50 percent of all purchases are the result of word-of-mouth recommendations. As a result, it’s imperative for a smaller franchise brand to focus its efforts on providing its customers an exceptional buying experience to drive positive reviews. A few comments made between friends about a great experience can mean the difference between a strong fiscal quarter or a budget that is in the red. Just 1,000 customers can generate up to 500,000 conversations about a franchise brand, according to Lithium. As long as customers are having a great experience with a brand and saying the right things, it can be extremely powerful.

Utilize Your Location’s Square Footage

Smart underdogs realize that the power of persuasion starts inside of their franchise locations. Every square foot of a franchise location is a marketing opportunity. By utilizing this physical space, an underdog can create a brand that sticks in consumers’ minds and hearts. Use every inch of property to convey important messages to the thousands of customers that walk through the front doors. Such physical property as trucks, exterior and interior walls, LCD screens, napkins, plates and point-of-purchase displays all represent an opportunity to drive sales with strategic messages.

Enact Robust Customer Loyalty and Retention Programs

Public opinion regarding the quality of customer service a franchise provides can help a brand thrive or fail. Deploying robust customer loyalty programs help ensure retention for the long haul. Approximately 71 percent of consumers have ended their relationship with a company due to poor customer service, according to Kissmetrics, a web analytics provider. With the average value of a lost customer totaling $243, franchises — especially smaller brands — can’t afford to lose sight of what’s important: providing exceptional customer experience. Every time a customer benefits from a rewards program, the chance increases that he will support the brand with positive reviews and continue to utilize the franchise’s services or products increases.

Deploy Local Grassroots Marketing Tactics

Creating a strong bond with a local community allows an underdog franchise to sweep in under the big brands to gain a greater customer following. Consumers are often enticed to purchase a product or service from another provider when there is a localized incentive. For example, a pizza franchise can gain new customers by sending out a flier through a school network that promises to dedicate a percentage of the profits to a class trip, club or program. Customers not only get the pizza they were planning on having for dinner, but also a warm and fuzzy feeling for helping their local school community — a double win. Whether it’s schools, sports teams, youth groups or other local organizations, the opportunities for community grassroots marketing are endless.

Maximize the Power of Social Media

A strategic underdog marketer makes the most of social networks by engaging with customers through humor, photos, offers, contests, and other ideas on a regular basis. In addition to pro-active social media engagement programs, review sites have grown exponentially as consumers of all ages use these platforms to share opinions about brands, products and services.Online customer reviews not only affect whether a customer will make a purchase or not, but also influence the perceived value of a product or service. For example, researchers found that someone intending to buy a high-tech product like an iPad would pay $22 more based on positive online reviews by strangers and $27 more based on reviews by a close friend or family member, according to The Atlantic magazine. On the other hand, a negative online review by a stranger would make a consumer want to pay $32 less for the product. Franchise brands’ products or services value in the marketplace are increasingly dependent on consumer opinion. By diligently providing exceptional customer service, an underdog franchise brand can utilize public opinion to boost the perceived value of merchandise and perhaps charge more. Rather than trying to compete with the big guys at their level, an underdog franchise can use the power of all of these strategies, and others, to effectively market their brand. In the end, if done right, the smaller brands can find they actually have the edge over the giant in their space.  

Sherri Fishman, CFE, is the president and co-founder of Fishman PR, a franchise PR and content marketing agency and a member of the IFA’s Marketing and Communications Committee. Find her at fransocial.franchise.org.

Underdog Marketing Statistics

• 92 percent of consumers trust recommendations from friends and family more than other forms of advertising. (Lithium)
• About 20 to 50 percent of all purchases are the result of word-of-mouth recommendations. (AdAge)
• Just 1,000 customers can generate up to 500,000 conversations about a franchise brand. (Lithium)
• Approximately 71 percent of consumers have ended their relationship with a company due to poor customer service. (Kissmetrics)
• The average value of a lost customer totals $243. (Kissmetrics)
• A negative online review by a stranger would make a consumer want to pay $32.30 less for the product. (The Atlantic magazine)
• Someone intending to buy a high-tech product like an iPad would pay $22.26 more based on positive online reviews from strangers. (The Atlantic magazine)
• Someone intending to buy a high-tech product like an iPad would pay $27.42 more based on a review from a close friend or family member. (The Atlantic magazine)